Cosmos ATOM rises as technicals point to a strong breakout

Cosmos hit an all-time high of $4.45 on Saturday, its highest level since March 4 and up 32% from its year-to-date low. The surge came as Bitcoin and other altcoins bounced back. Ripple and Cardano gained more than 1.45% on Saturday.Cosmos' price also surged as investors bought it after it fell to key support levels. Its 24-hour volume rose to over $153 million, according to CoinMarketCap.

Similarly, futures open interest rose to $93 million, the highest level since February 2021. Open interest is a metric that takes into account the volume of outstanding put and call option orders in the futures ecosystem. In most cases, cryptocurrencies tend to bounce back when open interest rises.

First, Cosmos pioneered the concept of the internet of blockchains, which consists of interconnected and independent blockchains that work together seamlessly. Some of the major players in this ecosystem include networks like Osmosis, Celestia, Thorchain, and Cronos.

ATOM’s price also surged due to technical reasons. The daily chart shows that the token fell to a low of $3.4123 this week. This was a significant level, as it coincided with the lowest swing low of September last year – a sign that it had formed a large double bottom pattern, with the neckline at the December high at $12.2.

Cosmos’ price also formed a falling wedge pattern, which consists of two descending and converging trend lines. A bullish breakout usually occurs when the two lines get close to convergence.

There are signs that the token is forming a bullish divergence pattern. The Percentage Price Oscillator (PPO) is gradually rising after hitting a low of minus 9.95 earlier this month. Additionally, the Relative Strength Index (RSI) rose slightly above the downward trend line, adding to the highest volatility since December 13 last year.

Thus, the combination of the falling wedge and double bottom patterns is a signal that the coin will bounce back, possibly to the resistance level of $5.8783, which was the low of December 20 last year.

This target is about 32% higher than the current level. A drop below this month’s low of $3.4 would invalidate the bullish outlook.a